Expatica news

Billion-dollar ‘merger’ trial begins

2 December 2003

WILMINGTON – Lawyers for a US investor told a federal judge this week that they were seeking more than USD one billion in damages over DaimlerChrysler’s five-year-old merger with Chrysler Corp., one of the Big Three US automakers.

Opening statements were made Monday in a lawsuit by billionaire investor Kirk Kerkorian, the largest individual Chrysler shareholder at the time of the merger. He alleges that Daimler-Benz AG misled US investors that the deal was a “merger of equals” instead of a takeover.

A takeover would have added a USD10 billion merger premium to the USD36 billion deal. Kerkorian’s suit originally sought USD eight billion when first filed three years ago.

Terry Christensen, a lawyer for Kerkorian, told the judge Monday that Daimler-Benz executives had committed a classic fraud. DaimlerChrysler lawyers have called the allegation “absurd”.

A similar suit filed by smaller investors was settled by DaimlerChrysler in August for USD 300 million.

DaimlerChrysler’s stock has lost more than half its value since the 12 November 1998, merger, and unhappy shareholders have launched lawsuits and called for management shake-ups.

The Chrysler Group has lost billions of dollars since the merger in 1998, and is struggling to achieve an operating profit in 2003 after losing EUR 1.1 billion in the second quarter.

Subject: German news